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Meeting The Challenge of Technological Change -A Standard Setter's Perspective
James M. Sylph
FCA, Director, Strategic Programs, Studies & Standards, CICA Gregory P. Shields CA, Senior Manager, Auditing Standards, CICA
INTRODUCTION
Will there still be work for auditors in the year 2016? The continued existence of a meaningful role for external auditors will depend to a great extent on how well the auditing profession can adapt to the continuous and rapid advances in information and communications technology (IT) and the changing information needs of users. While adapting to change ultimately is the responsibility of the individual public accountant, standard setting is vital to helping the profession as a whole move forward and continue to the meet the public's evolving needs and expectations.
Effectively assessing and reacting to the impact of technology is a matter of survival for auditors. In The End of Work Jeremy Rifkin notes that "a survey of recent technological developments and trends in agriculture, manufacturing and service sectors suggests that a near workerless world is fast approaching and may well arrive before society has sufficient time to either debate its broad implications or prepare for its full impact."1 Evolving IT is rapidly making its way up the work ladder, replacing not only many blue-collar manufacturing jobs and white collar clerical positions but also an increasingly significant number of middle management positions.2 And some professions are beginning to face serious competition from computers which solve the mysteries of the more mundane aspects of professional practice, enabling laymen to do the work themselves or hire a software-armed paraprofessional."3 The question then is how will auditors cope with, or perhaps even thrive in, a high-tech environment.
High-tech environment
High-tech has been defined as "a term for sophisticated, often complex and specialized innovation."4 The concept of a 'high-tech environment' is subjective and constantly changing as IT evolves. However, IT can be viewed as having two fundamental functions, whereby it:
(a) automates (i.e., replaces the human body with a technology that enables the same processes to be performed by a machine with more continuity and control); and simultaneously
(b) 'informates' (i.e., generates information about the underlying productive and administrative processes (activities, events and objects) through which an organization
1 Rifkin, Jeremy, The End of Work, page 106.
2 Ibid., chapter 1.
3 Ross, Philip E. "Software As Career Threat", Forbes, May 22, 1995
4 Microsoft Press Computer Dictionary, 2nd Edition, 1994
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